Spain to help cover for nuclear accidents

Spain will help nuclear plant operators to increase civil liability cover for accidents by letting utilities pass the costs on to consumers, according to proposals in a draft bill cited in a press report on Thursday.

The Industry Ministry said in December that it was proposing to increase civil liability for operators to 1.2 billion euros from 150 million at present.

Cinco Dias daily said 500 million euros of that total could be covered by a "premium", a term applied in Spain to subsidies which are financed over 15 years and repaid by tariffs.

"It (the bill) expressly provides for the electricity system to offer the said (500 million euro) guarantee for damages not covered by insurance companies by means of a premium," the bill said, cited by Cinco Dias.

The bill reportedly added that countries which had signed the Brussels Convention could provide an additional 300 million euros of cover. Industry Ministry officials could not confirm how the increased liability was to be financed.

Spain's nuclear power plants are owned in varying proportions by Iberdrola , Endesa , Union Fenosa and Hidrocantabrico.

BNP-Fortis said in a research note that the proposed increase in civil liability could eventually undermine earnings by the plants' operators.

"However as we await more details on the position of the affected companies and confirmation we should not expect a relevant market reaction," it said.

The most serious nuclear accident to date in Spain was a fire at the Vandellos I power station in 1989, which rated three on the International Nuclear Events Scale and forced the plant to close. The scale rises from one to seven, with three rating as a "serious incident".

Spain's eight remaining nuclear plants provide around 20 percent of the country's electricity, a share which is gradually falling due to a boom in renewable energy.

Jose Luis Rodriguez Zapatero's Socialist government last year ordered the smallest and oldest nuclear plant, Garona, to close in 2013, and has ruled out building new plants, but may allow existing reactors to run for several decades.